Affordable Housing Extended Survey

Draft Affordable Housing Policy

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1.1 The purpose of this policy is to provide a Council position and framework to guide and facilitate an increase in the supply of affordable housing on public and private land within Frankston City through the local land use planning system, advocacy and partnerships.

1.2 This policy sets out Council’s role and policy framework to guide and inform Council’s planning, decision making and advocacy pertaining to affordable housing in Frankston City, with the intention of encouraging:

1.2.1 A net increase in the number, diversity, and quality of affordable housing dwellings to meet Frankston City’s growing and changing population needs.

1.2.2 Affordable housing outcomes that are accessible for very low-, low- and moderate-income households so all residents have access to suitable and quality housing options that are within their means.

1.2.3 An equitable distribution of affordable housing across the municipality that is well-located near services, jobs and public transport, and well-integrated with the local community, neighbourhood character and amenity of the area.

1.2.4 A diverse mix of housing types and tenures to accommodate increasing densities, different life stages, housing patterns, income levels and community needs, including mixed tenure developments, private-public partnerships, build-to-rent and cohousing.

1.2.5 High quality and sustainable affordable housing outcomes that are aligned with Council’s strategic planning objectives and policy frameworks and deliver public value.

1.2.6 Council being positioned to more effectively support and partner with the Victorian and Australian Governments, community housing organisations, developers and other private investors and community groups to facilitate opportunities, investment and leadership to increase and improve the quality of affordable housing supply.

1.2.7 Improved community support for affordable housing as essential infrastructure for thriving communities.

2.1 This policy relates to affordable housing, as defined by the Victorian Government (see Definitions).

2.2 This policy applies to Council’s councillors, CEO, employees and any other persons undertaking planning and delivery of services on behalf of Council.

2.3 This policy recognises that affordable housing exists along a continuum, where the level of assistance or subsidy required is highest at one end of the continuum and progressively decreases to the other end. However, this policy is focused on increasing the supply of those affordable housing options (including social housing as a subset of affordable housing) that provide secure long-term housing solutions, and is principally focused on activity where local government can play a constructive role and have the most influence. Council’s powers to increase housing supply across the whole continuum is limited and set by the Victorian Government’s Planning and Environment 1987, Local Government Act 2020 and the Victorian Planning Scheme.

3.1 Affordable housing: Under the Planning and Environment Act 1987, affordable housing is a broad term describing housing (including social housing) that is appropriate to the needs of a range of very low, low, and moderate-income households and is priced (whether bought or rented) so these households can meet their other essential living costs. The income ranges for these households are set by the Victorian Government and reviewed annually to reflect median household income.

3.2 Affordable housing contribution: A contribution from a landowner or developer of land, cash and/or dwellings, negotiated through the planning system.

3.3 Affordable rental housing: Affordable rental housing is aimed towards low to moderate income households and provides rental homes at least 10 per cent below the market rental cost with fixed term leases to give renters time to save for a house deposit or move back into a private rental. Affordable rental housing is managed by a range of providers, including registered community housing organisations, charities and real estate agencies.

3.4 Annual income ranges: Under the Planning and Environment Act 1987, the Victorian Government specifies the income ranges for metropolitan Melbourne for affordable housing that is not social housing. These income ranges are published annually.

3.5 Community housing: Housing that is owned and/or managed by a community housing organisation. It comprises long-term rental housing that offers subsidised rent costing not more than 30 per cent of a total household’s income. The community housing sector and Homes Victoria often work in partnership to deliver housing to those who need support. Some community housing providers specialise in helping specific groups, like Aboriginal and Torres Strait Islanders, people with disability, women and older people.

3.6 Homelessness: The Australian Bureau of Statistics (ABS) definition for homelessness is when a person does not have suitable accommodation alternatives, they are considered homeless if their current living arrangement: a) is in a dwelling that is inadequate; b) has no tenure, or if their initial tenure is short and non-extendable, or; c) does not allow them to have control of, and access to space for social relations. People living in boarding houses (defined as commercial accommodation usually not self-contained but with private rooms) is counted as a homelessness operational group.

3.7 Housing stress: A household is typically described as being in housing stress if it is paying more than 30% of its gross household income in housing costs. As higher income households can spend a higher proportion of their income on housing without experiencing stress, a ratio of 30/40 is often used as a benchmark—that is, if households that fall in the bottom 40% by income spend more than 30% of their gross household income on housing, they are defined as being in housing stress. This policy focuses on households who are experiencing rental stress.

3.8 Key workers: Individuals who perform services that are critical to the functioning of society and need to be physically present on a work site. These include services that provide living essentials (e.g. food and fuel distribution) and maintain the public health and safety as well as those who service the most basic needs of the community (e.g. education, community care, retail and infrastructure maintenance). This policy focuses on key workers whose household earns very low, low, or moderate incomes.

3.9 Key worker housing: This policy uses the definition of key worker housing adopted by City of Melbourne, as affordable rental housing that is appropriate for people who within the [local government area], who require a physical presence to perform their work, and whose household earns a very low, low or moderate incomes. The housing must be allocated and monitored by a Registered Housing Agency.

3.10 Registered community housing organisation: Community housing organisations are mission-driven, not-for-profit organisations that own, develop and maintain rental housing for people on low incomes, and specialise in housing the diverse range of tenants that require both social and affordable housing. Registered community housing organisations are regulated by the Victorian Government under the Housing Act 1983. The scale at which community housing organisations can develop, own and manage community housing differs across organisations.

3.11Rental Stress: The ABS defines rental stress as rental housing that costs more than 30% of the gross household income for those households whose equivalised disposable income falls within the bottom 40% of Australia’s income distribution.

3.12 Section 173 Agreement: A Section 173 Agreement is a legal contract made between Council and a landowner under Section 173 of the Planning and Environment Act 1987. This enables Council, as a responsible authority, to negotiate an agreement with a landowner to set out conditions or restrictions on the use or development of the land, or to achieve other planning objectives in relation to the land. These agreements are voluntary in nature, and council cannot force a landowner to enter into an agreement.

3.13 Social housing: Social housing is a subset of affordable housing and is for people on very low to low incomes who need housing, especially those who have recently experienced homelessness, family violence or have other special needs. It is made up of two types of housing, public housing (owned and managed by Homes Victoria) and community housing (owned and/or managed by registered community housing providers). Social housing includes both subsidised short and long-term rental housing and calculated at no more than 30 per cent of the household’s income to ensure that households pay an affordable rent. Social housing is accessed through the Victorian Housing Register.

Council’s policy framework

5.1 This policy framework identifies Council’s role in facilitating and guiding an increased supply of affordable housing on public and private land within Frankston City as being through:

5.1.1 Council as a supply enabler: Council will pursue its statutory role as the responsible authority for the local planning scheme to act as an enabler of housing supply by leveraging from the land use planning system to facilitate housing that accommodates population growth and community needs to support a healthy housing market.

5.1.2 Council as an advocate: Council will advocate for continued investment in Frankston City by ensuring that the needs of the Frankston City community are understood by relevant stakeholders and being considered by Federal and State Government and those involved in the local development process through appropriate levels of investment and/or reform.

5.1.3 Council as a partner: Council will actively explore opportunities to invest in partnerships with the purpose of facilitating an increased supply of affordable housing where appropriate.

5.2 Council amends the Frankston Planning Scheme to align with the overall vision and policy objectives for affordable housing set out by this policy and refer to this policy as a background document at any clause that includes policy regarding affordable housing.

5.3 Council will review the Frankston Planning Scheme every four years, within 12 months of the Council Plan being adopted, to ensure the Scheme:

5.3.1 Contains contemporary information regarding changing demographics and diverse housing needs of the Frankston City community as they evolve over time.

5.3.2 Responds to the community’s long-term vision for residential use and development in the municipality.

5.3.3 Reflects changes and complies with state and local legislation and policy.

5.3.4 Imposes the minimum level of regulatory burden necessary to satisfactorily address identified planning and environmental risks.

5.4 Council will pursue internal process improvement initiatives to ensure the efficient assessment of all residential planning permit applications in accordance with Section 197 of the Planning and Environment Act 1987.

5.5 Council ensures that strategic planning and policy documents with implications for changes in residential use and development across the municipality (such as the Housing Strategy, Structure Plans, Development Plans, etc) respond to the housing needs of all current and future residents and consider opportunities to increase the supply of affordable housing, by providing:

5.5.1 An assessment of the diverse housing needs of current and future communities, taking into consideration existing housing supply, forecast population growth and changes in the local demographic profile.

5.5.2 An assessment of the availability and suitability of land and sites for housing to meet expected needs, including preferred locations for affordable housing, such as locations with good access to services, jobs and public transport.

5.5.3 Simple, clear and strategically justified policy and development rules that support the realisation of preferred housing outcomes.

5.6 Council will prioritise investment in development and social infrastructure that is necessary to enable the supply of housing and underpin the amenity and liveability for future residents, particularly in locations earmarked for residential development with good access to services, jobs and public transport.

5.7 Council reviews policies and strategies relevant to Council-owned property to ensure they acknowledge affordable housing as essential infrastructure that provides an important foundation for sustainable communities, and where appropriate gives due consideration to affordable housing in the assessment of surplus Council-owned assets, including the sale for disposal of surplus Council-owned land.

5.8 Council explores appropriate Victorian and Australian Government funding programs designed to address infrastructure blockages to housing development as per the policies, rules and guidelines in the Frankston Planning Scheme.

5.9 Council engages with relevant Victorian Government agencies to support a pipeline of development ready housing land within Frankston City, which when appropriate may include the identification of possible strategic sites with the view to expanding local housing supply.

5.10 Council will encourage a range of affordable housing delivery models that meet the needs of different income groups along the housing continuum including affordable purchase, shared equity, build to rent, rent to buy, affordable housing suitable for older people/retirement living, social housing and affordable housing managed by registered housing agencies.

5.11 Council will build the knowledge and capacity of staff across Council in affordable housing by working with registered community housing organisations, peak bodies and other stakeholders active in researching, building and operating affordable housing. This includes building an understanding of the housing needs for population cohorts most in need of affordable housing.

5.12 Council engages with landowners and developers to incentivise the negotiation of affordable housing contributions and encourage an increased supply of affordable housing using planning system provisions that are within Council’s control and aligned with Council’s strategic planning principles (noting that incentives will be assessed on a case-by-case basis). Council may do this by:

5.12.1 Implementing the Development Activation Program within the Frankston Metropolitan Activity Centre (FMAC) with the intention of accelerating an increase housing supply through the statutory planning system, which includes encouraging the provision of affordable housing that is managed by a registered community housing organisation.

5.12.2 Seeking affordable housing contributions of three per cent of dwellings in private residential developments which result in a net increase of three dwellings or more, when assessing planning permits that are considered suitable for affordable housing contributions. Council will seek for these dwellings to be transferred to registered community housing organisations (or for an equivalent cash contribution to be made). 

5.12.3 Through appropriate land use planning provisions in the Frankston Planning Scheme, seeking affordable housing contributions of three per cent of dwellings for projects on private land that is upzoned, with these dwellings being transferred to registered community housing organisations (or for an equivalent cash contribution to be made).

5.12.4 transferred for free to registered community housing organisations (or equivalent cash contributions) for projects on private land that is upzoned.

5.12.5 Seeking a minimum of six per cent of dwellings as affordable housing for all residential and mixed-use developments on public land, with these dwellings being transferred to registered community housing organisations.

5.12.6 Exploring funding models for Council to collect development contributions made as cash for the sustainable investment into partnership projects that increase affordable housing supply.

5.13 Council will prepare guidelines to clarify the operation and process for securing affordable housing development contributions for development proponents and Council officers.

5.14 Council will develop criteria to guide Council officers and developers to consider whether a proposed affordable housing contribution will result in appropriate housing for very low-, low- and moderate-income households, based on the following principles:

5.14.1 An eligibility and allocation process to ensure that the housing goes to people who need it. Council’s preference is for this process to be managed by a registered community housing organisation and involve tenants through the Victorian Housing Register.

5.14.2 The rent or purchase price is affordable relative to the income of its so households can meet their other essential living costs (generally no more than 30% of a households income).

5.14.3 The housing is well-located throughout the municipality and close to services, jobs and public transport, and well connected to a range of support services.

5.14.4 The housing is of high quality and fit-for-purpose and aligned with Council’s strategic planning frameworks and the requirements of the Better Apartment Design Standards (negotiations should not reduce the form or quality of the housing to an unacceptable level).

5.14.5 The housing is well-integrated in with character and amenity of an area, with affordable housing developments looking no different from the other dwellings in that development or area (physical build and local community), to ensure safety and wellbeing of its tenants.

5.14.6 The housing is well-managed and well-maintained to ensure a safe, supportive and cohesive community, and to reduce the stigma associated with social housing developments.

5.14.7 The longevity of the housing outcome.

5.14.8 The affordable housing needs of the area.

5.15 Council will regulate and enforce planning, building and health requirements outlined in State Government legislation with regard to rooming houses, ensuring reasonable standards of hygiene, sanitation and maintenance.

Council strengthens community understanding of the importance of affordable housing as essential infrastructure necessary for thriving, healthy and resilient communities and economies, through clear articulation of:

5.16.1 The housing affordability challenge and measured affordable housing need within the municipality.

5.16.2 The breadth of benefits that arise from increasing the supply of affordable housing, including benefits to tenants, the community, and the local economy.

5.16.3 The role of local government as a key stakeholder in facilitating the increased supply of affordable housing.

5.17 Council advocates to the Victorian Government for the introduction of a state-wide mandatory inclusionary provision requiring private development proponents to make a fair and reasonable contribution to the provision of affordable housing.

5.18 Council advocates to the Victorian Government for revisions to the Planning Policy Framework and accompanying guidance to establish a more transparent and uniform procedure for local councils seeking to implement development contributions for affordable housing.

5.19 Council advocates to the Victorian Government for the inclusion of a meaningful contribution of affordable housing (minimum six per cent of all dwellings, transferred for free to registered community housing organisations) within significant state-led infrastructure and urban renewal projects, including projects delivered in consortium with private-sector and not-for-profit partners.

5.20 Council advocates to the Victorian Government for the redevelopment and renewal of existing state-owned public housing sites within the Frankston City municipality to increase the quality, yield and mix of affordable housing dwellings area.

5.21 Council advocates to the Victorian Government to identify surplus public land assets that may be appropriately redeveloped for the purpose of delivering affordable housing, particularly public land located with good access to services, jobs and public transport.

5.22 Advocate for Council’s preferences regarding development outcomes on projects led or funded by the Victorian Government. For example:

5.22.1 Provision of a mix of affordable housing dwellings (dwellings type, size, subsidy arrangement, universal design etc.) which responds to identified local needs.

5.22.2 Integration of affordable housing dwellings with private market dwellings.

5.22.3. Connectivity to surrounding services, jobs and public and active transport networks.

5.22.4 Response to neighbourhood character and amenity.

5.22.5 Response to Environmentally Sustainable Design (ESD) principles.

5.22.6 Alignment with Council-adopted strategic planning frameworks.

5.23 Council advocate to the Victorian Government for adequate investment into the provision of crisis accommodation and funding for specialist homelessness services within Frankston City to enable the required supports for people experience homelessness to build pathways into long-term secure affordable housing.

5.24 Council partners with stakeholders to deliver effective and targeted advocacy for the dedication of more resources to address the unmet need for affordable housing in Frankston City, including the Victorian and Australian Governments.

5.25 Council will share information, data analysis and best practice with the Victorian Government, developers, registered housing organisations and other councils to strengthen the shared understanding of housing needs in the Frankston City community and advocate for housing growth. This includes information about the needs of the population cohorts most in need of affordable housing.

5.26 Council will collaborate with major employers in Frankton City to identify opportunities to advocate for solutions to support very low, low and moderate income key workers experiencing rental stress, such as:

5.26.1 Employer-assisted housing programs that provide financial and administrative support to eligible employees.

5.26.2 Locating business premises in areas with good access to services, jobs and public transport.

5.26.3Employer-funded contributions of (land, financing, or other resources) to support the development of housing for very-low, low and moderate income essential workers on-site or near work premises.

5.27 Council will recognise the Victorian Aboriginal Housing and Homelessness Framework and the National Housing and Homeless plan to guide advocacy work.

Council engages with registered community housing organisations, landowners, developers, service providers and other key stakeholders to build relationships, broker partnerships and encourage funding applications that increase local affordable housing supply and improve support for households living in affordable housing.

5.29 When identifying Council-owned land that is surplus to Council requirements (vacant or underutilised) that may be suitable for redevelopment or disposal, Council will consider its purpose for increasing the supply of affordable housing, taking into consideration:

5.29.1 The location of the site, including whether the site has (or will have) good access to services, jobs and public and active transport networks.

5.29.2 The community benefit which can be derived from the site in terms of yield of affordable housing dwellings.

5.29.4 The opportunity cost of developing the site for affordable housing as opposed to use of the site for other community purposes.

5.30 Council explores partnerships with developers or non-profit organisations specialised in affordable housing who demonstrate:

5.30.1 An ongoing commitment to provide affordable housing within Frankston City.

5.30.2 A proven record of providing and managing housing for very low, low and moderate- income households.

5.30.3 Ability to secure ongoing funding.

5.30.4 Good governance.

5.31 Council to actively participate in alliances, collective impact projects and inter-council forums and work with peak bodies to collectively contribute towards addressing unmet needs for affordable within Frankston City and the south-east region. This includes the Strategic Housing and Homelessness Alliance, Frankston Zero, Regional Local Government Homelessness and Social Housing Charter Group, Municipal Association of Victoria (MAV) and Victorian Local Governance Association (VLGA).

Roles and responsibilities for affordable housing

6.1 This policy recognises the funding, management and policy context of affordable housing is primarily the responsibility of the Federal and State Governments and those involved in the land development process (landowners and developers), and that local government has a facilitation role through the local land use planning system, advocacy and partnerships.

6.2 The Australian Government assists with poverty mitigation and is responsible for funding homelessness services, funding the states and territories to improve access to affordable housing, providing low-cost financing for social housing projects and the provision of individual support and Commonwealth Rent Assistance.

6.3 In Victoria, the State Government is responsible for overseeing the public housing system and funding registered community housing organisations to manage community housing. It is also responsible for administering the homelessness funding for specialist homelessness services to help people experiencing or at risk of homelessness to find housing and access support.

6.4 The community housing sector (not-for-profit) also plays an important role in managing and developing affordable housing. The development sector is also essential for housing construction. The private development sector has access to finance and capital, plus the experience to deliver housing developments at a scale and efficiency that other sectors do not.

6.5 The Planning and Environment Act 1987 provides local councils with a means of facilitating affordable housing through the local development process. It is important to note that this a voluntary process and requires agreement from landowners who are seeking to obtain a planning scheme amendment or planning permit.

6.6 The Local Government Act 2020 guides local councils in any role they adopt for affordable housing, and places statutory obligations on councils: to demonstrate good governance for the benefit and wellbeing of the community in making decisions about Council’s role pertaining to affordable housing (S8); permits council to participate in a beneficial enterprise such as joint venture (S110); and stipulated requirements for making decisions on the sale or exchange of land (S114) or lease of land (S115).

6.7 This policy identifies Council’s role in facilitating and guiding an increased supply of affordable housing on public and private land within Frankston City as being through its statutory role as an enabler of housing supply, as an advocate for the needs of the Frankston City community and as a partner to actively pursue investment opportunities (see Council’s policy framework at 5.1).

6.8 Council’s accountability and responsibility for the policy are outlined below:

6.8.1 Manager City Futures and Coordinator Social Policy & Planning shall be responsible for ensuring councillors, managers and coordinators, contractors and volunteers are informed of this policy; and will be responsible for developing procedures to achieve compliance with this policy.

6.8.2 Managers and Coordinators within Council are responsible for ensuring all Council Officers consider this policy in all activities and decision-making processes pertaining to affordable housing.

6.8.3 Managers and Coordinators within Council will support staff in seeking further knowledge and training in affordable housing issues where there is value in sharing of knowledge within the organisation and community.

6.8.4 Manager City Futures and Coordinator Social Policy & Planning shall be responsible for the review of this policy.

6.8.5 Director Communities and Chief Executive Officer have overall responsibility for compliance with this policy.

Non-compliance with this policy has the potential to limit the opportunity for Council to play a constructive role in guiding and facilitating an increase in affordable housing supply within Frankston City, resulting in poorer outcomes for the community through unmet need for affordable housing.

Strategic documents

Plan Melbourne 2017-2050
Frankston City Municipal Planning Strategy
Frankston Local Planning Scheme and Local Planning Policy Framework
Frankston City Community Vision 2040
Frankston City Council Plan 2021-25
Housing Strategy (in development)
FMAC Structure Plan (adopted 2023)
Frankston City Economic Development Strategy (adopted 2024)
Frankston City Property Strategy (adopted 2021)
Frankston City Health and Wellbeing Plan 2021-25
Safer Communities Strategy (adopted 2023)

Legislation

Planning and Environment Act 1987
Local Government Act 2020
Housing Act 1983
Victorian Planning Provisions
Informing documents
Affordable Housing Technical Report and Background Analysis, SGS Economics and Planning
Frankston City Housing Strategy Discussion Paper 2023

9.1 This policy applies to all Council decisions and actions pertaining to affordable housing in Frankston City, and is to be considered when:

9.1.1 Preparing policies, strategies and plans linked with land use planning and affordable housing supply.

9.1.2 Considering planning permit applications.

9.1.3Undertaking land use planning functions like rezoning land for residential development or structure planning.

9.1.4Entering into agreements with the Federal Government, State Government, government agencies like Homes Victoria, developers or registered community housing organisations.

9.1.5Preparing funding and/or grant applications.

9.1.6Council-owned land is being developed or disposed of.

9.1.7Building relationships with developers and community housing.

9.1.8Engaging with the community on residential development.

9.2 This Policy will be implemented in conjunction with the other Related Documents, and be guided by availability of resources, current priorities and any emerging issues or opportunities. Where additional resources are required to implement this policy, these will be subject to Council’s annual budget processes and/or external funding opportunities.

9.3 This policy will be reviewed every four years, or sooner if required by legislation or organisational changes.

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